Students are invited to consider doing an independent study
with Professor Twomey on:

### "Macroeconometric Models of the U.S. Economy"

The focus of the course is statistical models of the U.S. economy; in particular, that of Ray Fair of
Yale University. The model, together with its
Workbook and all supporting software, is available for free on the Web at http://fairmodel.econ.yale.edu/usmodel/index2.htm.
During the semester, students will perform a series of workbook exercises with
the model, investigating topics such as the estimated impacts of monetary and fiscal
policies, international effects, and some supply side analyses.

In addition, we will compare the equations in Fair's models with those of
other published models, such as Brookings, Goldberger, and Hall & Taylor,
looking both at the general structure as well as particular aspects such as
consumption functions, investment accelerator, and the demand for money.

All of this leads to an attempt at comparing the macroeconomic predictions
of the Fairmodel with those of other major models on the market, as available
in the Wall St. Journal as well as standard academic sources, with the
immediate goal of appreciating the range of the actual predictions, as well as
the more fundamental goal task of understanding the relative importance of
theory and practicality in generating predictions.

An independent study (Econ 499) is a course taken for credit (three hours,
in this case) on a pass/fail basis (which means that it cannot serve as an
upper division elective for the Economics major). Because it is an independent
study, there are no formal class lectures, but students are expected to meet
periodically with the professor to discuss the material and present results. In
the case of this course, much of the work will be discussion of the results of
the computer runs, and analysis of the underlying economics. Some short papers
will be required, as well. Click here for the tentative Syllabus
and for some suggestions on How to get started.

The course will be at the level of intermediate macroeconomics (Econ 301)
and the regressions part of statistics (Econ 305). Students should probably
have completed one of those courses, and be concurrently taking the other (or
its equivalent) while enrolled in the independent study. Evidently, the course
will involve much time on a computer, although no programming skills are needed
beyond being able to read a Web page. That may sound incredible, so students
who are potentially interested should check out the Fairmodel site at the
address listed above, to see for themselves. Professor Twomey's office is
upstairs in the CASL Annex; he can also be reached at 313-593-5176 (o),
313-995-1907 (h), or by clicking mtwomey@umd.umich.edu

Special forms for Enrolling in Independent Study can be obtained in the CASL
Advising Office in 1112 U-Mall.